Ian Burrell: How the favoured son's power finally melted away

He arrived with all the confidence of having made a success of growing BSkyB

When James Murdoch moved into his new office in Wapping in 2007, what a portfolio he had! His grand title and far-flung possessions were that of a mighty potentate. The chairman and chief executive for News Corp, Europe and Asia, he took charge of a British-based newspaper empire, News International, and television interests that stretched from Italy and Germany to the Far East.

He arrived with all the confidence of having made an undisputed success of growing the BSkyB satellite business that his father had pioneered a generation earlier and had no intention of giving that up either, holding on to the title of non-executive chairman. For good measure, he also took a non-executive directorship of pharma giant GlaxoSmithKline and a place on the board at the auction house Sotheby's.And now it has all melted away. Last year, when the Murdochs first blinked in the long-running face-off over whether James was culpable for his handling of phone hacking at News International, his father whisked him off to a new desk in New York and handed him an even more grandiose title: as deputy chief operating officer, the News Corp presumed heir.

The months have passed but the storm clouds from hacking hang over Manhattan as they do over London, as James admitted yesterday when he noted that his continued position as a "lightning rod" for the scandal was endangering the News Corp cash cow that is BSkyB. And so he gave up his post as chairman, just as he had earlier resigned from News International, and given up his roles at GSK and at Sotheby's.

James will have hoped that by quitting – ahead of a potentially critical parliamentary report – he would be seen as decisive. But as the Murdoch critic Michael Wolff joked last night, because Rupert's son no longer has any portfolio at all, James has less need than ever to demonstrate leadership skills.